A fraud investigation into Hanover and related companies is likely to be a long and complex one, Serious Fraud Office chief executive Adam Feeley said yesterday.

"It would be both unrealistic and unwise to think that an investigation of this complexity could be completed in a matter of weeks. This will be a lengthy inquiry and the only certainty from it is that any decisions reached will be the end result of a comprehensive and well-managed investigation," Feeley said.

The Serious Fraud Office yesterday confirmed that it had been conducting an investigation into Hanover Finance for the past three months and it has reasonable grounds to believe fraud may have been committed.

Separately, the Securities Commission earlier this month released a statement saying it had nearly completed an investigation into Hanover and might lay criminal charges against directors in the new year.

The commission said, given public and media speculation, it was in the public interest for it to clarify the status of its investigation into Hanover Finance.

Commission staff were near completion of their investigation into Hanover Finance, United Finance and Hanover Capital, the commission said.

"The investigation has been complex and involves a team including investigators, forensic accountants, financial analysts and lawyers. Commission members, who have been kept informed of progress of the investigation, will meet before Christmas to decide whether criminal charges will be laid against directors of the companies.

"Although no decision has yet been made, it is likely any charges will be laid in the new year," the commission said.

Today, Allied Farmers directors will front up to shareholders in the company's first annual general meeting since the debt-for-equity swap deal with Hanover last year.

The Allied meeting is being held in the company's home town of Hawera and might be attended by only a few shareholders.

Rob Alloway, Allied's managing director, said yesterday that shortly after the purchase of the Hanover and United assets, the company became concerned about the conduct of Hanover prior to the acquisition, and immediately raised those concerns with regulators.

"We were quite shocked at some of the activity that took place prior to our acquisition of the assets and immediately moved to alert regulators.

"Our staff has spent a considerable amount of time providing relevant files and interviews to both the Securities Commission and the Serious Fraud Office over the course of the year," Alloway said.

"We feel that the actions of the Hanover board and management while under moratorium have had a significant impact on the value of the assets, and investors deserve to have this investigated," Alloway said.